But it, like other online payment systems, also failed to gain traction. However, political change and other uncertainties in the economy might have led to these potential digital payment scheme's failure. In fact, the required digital infrastructure was lacking at the banks to make use of the apps to facilitate such transactions. But are we sure, if these digital payment systems could be popularised, our financial system would be foolproof? No doubt, there are many positive aspects of a financial system based completely on digital form of money which does not require a physical space to store, or transports to transfer from one place to another and the central bank doesn't have to print paper currency or mint coins. Obviously, a government could be saved from incurring the costs of producing and handling physical money. Also, the transactions would be faster, more transparent, could be easily traced, monitored and, of course, surveilled. As the transactions are transparent, it would theoretically be harder for corruption to take hold. It is said that in the absence of physical money, there would be fewer instances of crimes like robbery, burglary, etc.
Well, people who have little access to the banking system, could well be brought under the digital financial network. These are all very good and widely circulated merits of a possible cashless economy. In fact, advances like biometrics, which measure and analyse an individual's physical and behavioural characteristics, make copying or other forms of fraudulence real hard. Also, consider the embedded microchips, near field communication (NFC) technology, address verification service (AVS), geolocation, digital wallet and AI-based payment systems. These definitely strengthen security of digital transactions and act as milestones in the march towards a cashless society.
However, the bitter experience of 2016, when hackers broke into Bangladesh Bank's security architecture and then sent fake fund transfer requests through the SWIFT network (a secure international messaging service connecting thousands of financial institutions worldwide) to the Federal Reserve Bank of New York. They were actually able to transfer US$101 million to accounts in Sri Lanka and the Philippines and the money was later laundered through the Philippine's casinos. It exposed the weakness of digital security of the global digital payment network SWIFT as well as the vulnerability of digital transactions in our financial service itself when faced with cybercrime. So, as claimed by the advocates of a digital-only, cashless economy, the argument is not really watertight.
The Covid pandemic (which starting from the third week of December 2019 raged through the world till mid-March 2022) was instrumental in popularising online financial transactions as it helped avoid physical contact. But that does not mean that people's love for centuries-old paper currency (first used in seventh Century China and introduced in Europe in mid-17th Century) or for the millennia-old the metallic coin (introduced in ancient Lydia of modern-day Turkey in 7th Century BC) would vanish in a jiffy. According to a report published in Britain before the pandemic, up to one in five British citizens could be left behind if a digital-only transaction was established. If that is the case with a technologically advanced society like Britain, then there is a need for real statistics to gauge how the older educated generation, let alone the little or unlettered masses in the countryside, would fare under a fully digitised financial system. So, the paper currency and metallic coin may not entirely fall into disuse in the near future.
However, such arguments against cashless economy are not meant to infer that the efforts towards digitizing the country's financial transactions, especially payment protocols, are a futile exercise. It must go with the stream of financial technology and adapt to its latest advancements. But at same time, it would be thoughtless to erase the time-tested modes of transactions evolved over the millennia at one go.
Imagine a powerful solar magnetic storm impacting the Earth's atmosphere or a nuclear war, disrupting or erasing all the world's electronic communications and information storage systems. The indelible metal and paper-based money as well as records and storage systems would then come to our rescue.
God forbid, the world may not have to see such a day!
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